From the Editor
Our Health Care Rx
We cut to the chase and tell you how to find affordable coverage in tough situations.
By Janet Bodnar, Editor, Kiplinger's Personal Finance
October 2009
In the midst of the debate over health care, I received an e-mail from an interest group helpfully providing me with a list of horror stories from people who couldn't get affordable health coverage. I forwarded the message to contributing editor Kim Lankford, our expert on health insurance -- who proceeded to suggest solutions to all their problems. "There certainly are health-insurance horror stories," she messaged back to me. "But I wonder how hard these people tried to find better deals."
And guess what? You can get better deals, says Kim. Even though the U.S. health-care system has been described as "terminally ill," there really is quite a healthy market for insurance in most states (except in places such as New York and New Jersey, where wrongheaded legislation keeps insurance costs high).
That's what distinguishes Kiplinger's coverage of health insurance from what you normally read and hear in the media. While Congress wrestles with 1,000-page bills that try to regulate just about every aspect of health care, we cut to the chase and tell you how to find affordable coverage even in tough situations (see Score Big Savings on Health Coverage).
As one of the top insurance reporters in the country, Kim uses her 15 years of experience to point you in the right direction, starting with eHealthInsurance.com, an online proxy for a nationwide health-insurance market. Need more help? Find an agent through the National Association of Health Underwriters. In Three Health-Insurance Mistakes to Avoid, Kim lays out three pitfalls to avoid when you're buying health coverage.
From her perspective, how does Kim view the health-care debate? For starters, our feisty editor is fed up with partisan scare tactics on both sides. On one hand, an elderly acquaintance of her mother's was frightened into thinking that health-care legislation would eliminate her Medicare-paid dialysis (it wouldn't). On the other side, says Kim, the legislation's supporters pay too much attention to the "plight" of healthy 25-year-olds, many of whom can already buy insurance for $100 per month or less -- no more than they probably pay for car insurance, not to mention their cell-phone plan.
In Kim's view, emotional appeals and bad economics cause people to make poor decisions, such as signing up for expensive COBRA coverage when they could probably get cheaper insurance elsewhere. And attention is diverted from what she considers the bigger issues, such as cutting insurers' administrative expenses and providing coverage to people with medical conditions who live in states that don't have well-funded high-risk pools.
A personal note. I've been covering health insurance since I started in journalism (one of my first assignments was a series on -- surprise -- why health care costs so much). I'm most intrigued by creative solutions that are targeted to specific problems and cost far less than making the current system even more unwieldy. Some examples: Minnesota's health-care plan for state employees that compensates providers based on results rather than procedures; a group purchasing plan in Texas for employees of small businesses who otherwise wouldn't be able to afford coverage; and Safeway's corporate program that rewards its workers' healthy behaviors with lower premiums.
What will be the outcome of the health-care debate? Read our outlook in A Makeover for Health Care, and stay tuned.
P.S. For smart ways to buy all kinds of insurance, visit our insurance center.
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Reader Comments (2)
Posted by: Anittah Patrick at 09/15/2009 10:00:29 AM
It's unfortunate that space constraints prevented Ms. Bodnar from supporting her inflammatory claim that in New York "wrongheaded legislation keeps insurance costs high." My experience as a small business owner has been that New York state's progressive private-public partnership, Healthy New York, lets entrepreneurs like myself offer health insurance at a very reasonable cost. How reasonable? I'm paying less than $270 a month per individual to insure my team through Atlantis Health. Legislation may still be "wrongheaded" in some regards, but in terms of empowering small business owners to offer health insurance to their people, New York state has hit this one outta the park.
Posted by: Kim Lankford at 09/18/2009 08:32:23 AM
Thank you for your comments, Anittah. This is Kim Lankford, Kiplinger's insurance reporter. The "wrongheaded legislation" that Janet Bodnar was referring to is New York's rules for individual health insurance -- for people who need to buy their own coverage -- which is different than the rules for small groups. Unlike most states, New York requires health insurers to cover everyone, regardless of their medical condition, and can not charge them more because of their age or health. This means that a 25 year old in perfect health must pay the same rate as an 64 year old who has had double bypass surgery. The biggest problem, however, is that New York does not have any mandate requiring everyone to have coverage, which means that in many cases only sick people sign up and healthy people don't buy insurance until they are sick, which makes the insurance very expensive. And because there is not a standard pooling of risk, many health insurance companies choose not to sell individual health insurance in New York and prices go up for everyone. As a result, New York and New Jersey (which has similar laws) have by far the most expensive individual health insurance in the country. In most states, most people in their 20s can find individual health insurance for under $100 per month. In New York, they'd have to pay more than $500 per month -- regardless of their age. Even people in their 30s and 40s, who can usually find insurance in other states for less than $200 or $300 per month (even with some medical conditions) would have to pay more than $500 per month in New York. Families in New York must pay well over $1,000 per month for their coverage. The state's Healthy New York program does provide some breaks for individual insurance, but the income limits are low and the prices are still quite high -- to qualify for this special program, you must earn less than $27,000 per year if single, or your total family income must be less than $55,000 for a family of four. And even then an individual would have to pay $320 per month for an HMO with prescription drugs and more than $240 per month for a high-deductible health plan with prescription drugs (in New York City), and a family would pay more than $900 per month for the HMO and more than $700 per month for the high-deductible health plan with prescription-drug coverage. In many cases, even people who qualify for New York's special program could still find a better deal in most other states. I hope this helps.